Things We Learned During Day 1 of #NCPERSACE17
NCPERS kicked off the 2017 Annual Conference & Exhibition (ACE) on Monday, May 22, 2017. What did we learn during the first general session?
1. An investment consultant should work with trustees, staff & vendors by: giving various reports to the board, interactions with your plan actuary, reconciliation with the custodian, accounting disclosures, setting assumptions, implementing investment policy, assessing results & providing fiduciary education.
2. The key factors for researching and hiring an investment consultant are: organizational structure/ operations & personnel, investment process & portfolio characteristics, fees, performance, fit in the overall portfolio- initial & outgoing, client's active risk tolerance (particularly downside), client's understanding of the investment strategy, manager's willingness/ ability to provide client service, and issues of importance to the client (NCPERS Code of Conduct).
3. President Trump wants to rollback Dodd- Frank; this should concern public pensions because: there will be a lot of changes in regulatory infrastructure, it will eliminate the Volcker Rule ( it restricts US banks from making certain kinds of speculative investments that do not benefit their customers), it will lessen liquidity and capital requirements for banks (allows them to make more risky investments), there will be new restrictions on shareholders as far as their rights (a shareholder will have to own 1% of stock for 3 years in order to give a shareholder proposal, and it will bar the SEC from requiring companies from using universal proxy card.
4. Since 2010, every day 10,000 baby boomers are turning age 65. For many employers 1/3 or more of the workforce is between ages 50 and 65. When and how to draw the various retirement benefits is one of the most critical decisions retiring employees will make!
5. What should you know about Social Security? Reduced benefits can be drawn as early as 62, benefits can be increased by delaying retirement up to age 70, benefits may be taxable and can be reduced if you work, there are complex strategies for married couples, individual circumstances vary & matter in deciding when to file, choosing the wrong option can leave money on the table, and tools can help your participants make better, more informed decisions.
6. An outsourced chief investment officer (OCIO) may be attractive to public pensions because constrained resources & funding shortages impact public pension fund's ability to meet short term & long term investment & retirement objectives.